19 June 2012

South Africa: Dismay Over SA Government Bailout of IMF

Photo: Abokoe Sibanda
ANC Youth League members.

It is with some dismay that it was announced this morning that the South African Government is to make available US$2 billion dollars as a subvention to the International Monetary Fund. The announcement was made by the Minister of Finance, while he and the President were attending the G20 meeting in in Los Cabos, Mexico.

There are a number of questions that have thus far escaped the discussion that is taking place on the allocation of the US$2bn.

Firstly, when was this decision made, and was it raised in Cabinet? Were Alliance Partners informed of this allocation? Where does such an allocation relate to agreed ANC policies?

Secondly, has the allocation increased the power of the South African Government to influence IMF policies, and if so in what way?

Thirdly, at present hundreds of thousands of public sector workers are being told that they must accept pay increases of 6.5% while fuel and food prices continue to rocket. They are told that our Government does not have the resources to meet Union demands for a living wage. How then can US$2bn be found to bail out the very organisation that has undermined public sector workers globally.

These are important questions. The IMF and World Bank are not neutral institutions! They have been responsible for impoverishing vast numbers of people across the world, and especially in the South. They remain in the forefront of promoting privatisation, which has legitimised corruption, greed and the enrichment of global elites and their multinational companies. They have effectively forced governments to abandon even basic social security measures and to shift the burden of social provision onto the poor. They have been oblivious to the voices of the South, and like any other banking institution, work to protect dominant vested interests, and in this case, the interests of the US, the UK and other leading capitalist powers.

The IMF and World Bank claim to be in favour of Good Governance, but continue to hold governments to ransom, by threatening to withhold funding unless extreme austerity measures have been adopted, even if this contradicts popular mandates. In this way, they have consciously undermined democratic governance, and continue to do so.

The South African Municipal Workers Union (SAMWU) believes that the South African Government, using its connections with BRICS and other fora, could have used this opportunity to expose the rotten practices of the IMF, and to argue for an alternative to austerity and the perpetuation of fabulous levels of wealth by global elites.

SAMWU will be raising these issues within our Federation COSATU for discussion in Alliance structures, and shall demand answers to the questions that will inevitably come from underpaid public sector workers, and the communities they strive to serve.

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